Budget 2025: Have the VAT Thresholds changed?

If a business's turnover exceeds €80,000 (for businesses supplying goods) or €40,000 (for businesses supplying services only) it must register for VAT.

Budget 2025 announced a change to the VAT thresholds. For those selling products the new cut off point is €85,000 and for those delivering services it is €42,500. The new thresholds come into effect from 01 January 2025.

A VAT Registration Number is mandatory for businesses exceeding the VAT threshold. It uniquely identifies a business for VAT purposes and must be included on all VAT invoices and returns. To obtain a VAT Registration Number, businesses need to apply through Revenue and provide necessary details about their operations.

You need to charge your customers a different rate of VAT depending on that you are selling. The standard rate of VAT is 23% but there are reduced rates for certain goods and services.

• Reduced Rate of 13.5% applies to certain goods and services and building services.
• Second Reduced Rate of 9% applies to items including newspapers, certain printed materials, and admissions to cinemas, theatres, and other cultural events. Also applies to electricity and gas.
• Super Reduced Rate of 4.8% applies specifically to the supply of livestock and greyhounds.
• Zero Rate applies to certain goods and services, such as most food items, children’s clothing and footwear, and certain medical supplies and services.

There are also certain services are exempt from VAT, such as financial, educational, and medical services.

A VAT invoice should include the following details:

• Date of issue
• Unique invoice number
• Supplier's name, address, and VAT registration number
• Customer's name and address
• Description of the goods or services supplied
• Total amount excluding VAT
• VAT rate applied and the total VAT amount
• Total amount including VAT